​‘Development Ready’ Land: A New Approach to Land Supply and Demand under the National Policy Statement – Urban Development Capacity

By Fiona Aston A new National Policy Statement on Urban Development Capacity (NPS-UDC) has recently been introduced by Government as part of its package of responses to the housing affordability ‘crisis’. It directs local authorities to provide sufficient development capacity in their district and regional plans and policy statements for housing and business growth to meet demand.

National Policy Statements are ‘high order’ documents and local authorities must give effect to them.

It is no longer sufficient for local authorities to simply zone enough land to meet population and business growth projections. Land must be serviced, be commercially viable and meet demand for different types of development, different locations and different ‘price points’.

In Greater Christchurch, not all currently zoned land meets these new requirements. Aston Consultants has assisted clients in south Rolleston to achieve Special Housing Area status (covering 74 ha of land) on the basis that other zoned land at Rolleston is not ‘development ready’. This is principally due to complications arising from fragmented land ownership, high land values and high numbers of ‘lifestyle’ properties with some owners unwilling to aggregate or sell their land (click here to read more). Special Housing Area status allows the land to be subdivided for urban development under a streamlined consent process although still zoned Rural Inner Plains.

In other areas, development may not be feasible due to natural hazard constraints significantly increasing development costs potentially in combination with fragmented land ownership and difficulties in acquiring land required for key infrastructure.There are also understood to be land supply shortages in some areas such as Prebbleton.

Timeframes for meeting requirements under the NPS-UDC are tight. In High Growth Areas (ie. with 10% + growth per year and population of at least 30 000) Councils must:

Carry out housing and business development capacity assessments at least 3 yearly including for different locations and price points. The first assessments are to be completed by the end of 2017.

Set minimum targets for sufficient, feasible development capacity for housing in the short (3 years) and medium (3-10 years) term which are to be included in regional and district plans by the end of 2018. These changes to plans do not need to go through the normal RMA plan change consultation processes (Schedule 1).

Complete future development strategies for the long term (10-30 years) by end of 2018.

Provide an additional margin of feasible development capacity over and above the projected demand of at least 20% in the short and medium term and 15% in the long term (which factors in the proportion of feasible development capacity that may not be developed).

Undertake quarterly monitoring of market indicators of sufficient development capacity including prices and rents for housing, residential and business land, resource and building consents relative to population growth and housing affordability.

Councils that share jurisdiction over an Urban Area at strongly encouraged to work together to implement the NPS-UDC.The Greater Christchurch Urban Development Strategy is to be reviewed in 2017, followed by a review of Chapter 6 of the Canterbury Regional Policy Statement (Recovery and Rebuilding of Greater Christchurch). Waimakairi and Selwyn District Councils are in the early stages of District Plan Reviews, whilst the Christchurch Replacement Plan is now largely (but only just) operative. Auckland's Unity Plan is partly operative and Queenstown Lakes is a further high growth area which is midway through its District Plan Review.

All Councils will need to respond to the NPS-UDC in their plans. The focus on ‘minimum targets’ and ‘development ready’ land in the right places in relation to demand, and meeting different sectors of the market may not mean ‘business as usual’. ​ If you have any questions or comments in relation to the NPS-UDC please contact us.